Guyana to start auctioning oil blocks in 3Q 2022

Guyana will begin auctioning offshore oil blocks in the third quarter of 2022, ending the current system of direct awards, vice president Bharrat Jagdeo said.

Exploration and production contracts granted so far have been based on direct negotiations between the government and international oil companies, including ExxonMobil, operator of the 120,000 b/d Stabroek block.

In preparing for the auction, the government will determine whether companies with existing contracts - such as ExxonMobil that operates a total of three deepwater blocks - should be excluded from the tenders, Jagdeo said last week.

The government will also decide whether it will invest in seismic surveys before the tenders, or auction the blocks without them.

The government has given itself a year to make these policy decisions, Jagdeo said.

The government plans to offer acreage that has been relinquished by incumbents, he said.

ExxonMobil started production of 32.1°API Liza crude from the deepwater Stabroek block in December 2019. Its partners include US independent Hess and Chinese state-owned CNOOC unit Nexen. Three other Stabroek projects planned by ExxonMobil will raise output from the block to over 800,000 b/d by 2026, the company has said.

ExxonMobil increased its estimated recoverable resources from Stabroek by 1bn bl of oil equivalent (boe) to 10bn boe, the company said last month.

Other companies that are part of consortiums with exploration and production contracts include France's TotalEnergies, UK's Tullow, Spain's Repsol, Qatar Petroleum, and Canadian firms CGX Energy, Frontera and Eco Atlantic.

Yellowtail review

In a related matter, the natural resources ministry and environmental agency EPA have started a review of ExxonMobil's development plan for the Yellowtail project on Stabroek.

Yellotail is forecast to deliver up to 250,000 b/d by early 2026, making it the biggest such project in the South American country.

Yellowtail will be preceded by Liza 2 that will start producing 220,000 b/d in 2022, with another 220,000 b/d anticipated from a third project - Payara - starting in 2024.

By Canute James